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CHAPTER Special Purpose Books II
CHAPTER

11 —Other Books

MEANING OF KEY TERMS USED IN THE CHAPTER

1. Purchases Book It is a subsidiary book in which goods purchased on credit are recorded.
2. Purchases Return It is a subsidiary book in which returns outward, i.e., returns of goods
Book purchased on credit is recorded.
3. Sales Book It is a subsidiary book in which goods sold on credit are recorded.
4. Sales Return Book It is a subsidiary book in which returns inward, i.e., returns of goods sold on
credit are recorded.
5. Journal Proper It is a book in which transactions that are not recorded in any of the other
Subsidiary Books, are recorded.
6. Debit Note It is the document prepared to debit the account of the person.
For example, purchaser of goods prepares a Debit Note when goods are
returned to the seller.
7. Credit Note It is the document prepared to credit the account of the person.
For example, seller of goods prepares a Credit Note when goods are returned
by the purchaser.
8. Trade Discount Trade discount is the discount allowed by the seller to the buyer on
purchase of goods in large quantity. It is recorded in the Purchases Book and
Sales Book. But, in the ledger, purchases and sales are accounted at net amount.

CHAPTER SUMMARY

Table showing the Nature of Transactions Recorded in Subsidiary Books and their
Effect on Ledger Accounts
Name of the Book Nature of Transaction Entered Effect on Ledger Accounts
Debit (Dr.) Credit (Cr.)
1. Cash Book All cash and bank transactions. Cash and Bank A/c for receipts of Cash and Bank A/c for Payments
Cash and Cheques. of Cash and Cheque.
2. Purchases All credit purchases of goods. Purchases A/c Suppliers’ A/cs
Book
3. Sales Book All credit sale of goods. Customers’ A/cs Sales A/c
4. Purchases All returns of goods purchased Suppliers’ A/cs Purchases Return/Returns
Return Book by us from suppliers. Outward A/c
5. Sales Return All returns of goods sold by us Sales Return/Returns Inward A/c Customers’ A/cs
Book to customers.
6. Journal Proper All such transactions that cannot Account affected by transactions. Account affected by transactions.
be entered in the above five books.